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Michael Scanlon

Michael Scanlon

Partner, Washington, D.C.

[email protected]

+1 202.887.3668

Michael J. Scanlon is a partner in the Washington, D.C. office of Gibson Dunn. He is a member of the firm’s Securities Regulation and Corporate Governance, Securities Enforcement, and Corporate Transactions Practice Groups, and has an extensive practice representing U.S. and foreign public company and audit firm clients on regulatory, corporate governance, and enforcement matters.

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SEC Enforcement Action Highlights Importance of Non-GAAP Policies and Disclosure Controls and Procedures

April 17, 2023 | Posted by Michael A. Titera; Andrew L. Fabens; Michael Scanlon; Thomas J. Kim; Ronald O. Mueller; Brian J. Lane Topic(s): Disclosure; Financial Statements; Securities Regulation

​On March 14, 2023, the SEC charged DXC Technology Co. (“DXC") with making material misstatements with respect to its non-GAAP financial performance measures, stating that, DXC “negligently misclassif[ied] tens of millions of dollars of expenses as [transaction, separation and integration-related (“TSI")] costs and improperly exclude[ed] them in its reporting of non-GAAP measures." The SEC’s order also found that DXC, and specifically its controllership function and disclosure committee, failed to maintain “adequate" disclosure controls and procedures relating to DXC’s non-GAAP disclosures, citing the following shortcomings:

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PCAOB Adopts Final Rule on the Holding Foreign Companies Accountable Act

September 29, 2021 | Posted by David C. Ware; Michael Scanlon Topic(s): Capital Markets; Disclosure; Securities Regulation

On September 22, 2021, the Public Company Accounting Oversight Board (the “PCAOB“) adopted a final rule (the “Final Rule“) implementing the Holding Foreign Companies Accountable Act (the “HFCAA“), which became law in December 2020 and prohibits foreign companies from listing their securities on U.S. exchanges if the company has been unavailable for PCAOB inspection or investigation for three consecutive years. The Final Rule (available here) requires U.S. Securities and Exchange Commission (the “SEC“) approval before it goes into effect.

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SEC Chair Lays Out a Climate- and ESG-Oriented Agenda and Calls for Comments on Mandatory Climate-Related Disclosure Rules

March 16, 2021 | Posted by Elizabeth A. Ising; Hillary H. Holmes; James J. Moloney; Ronald O. Mueller; Thomas J. Kim; Lori Zyskowski; Michael Scanlon Topic(s): Corporate Governance; Disclosure; Securities Regulation

On March 15, 2021, the Acting Chair of the Securities and Exchange Commission (SEC), Allison Herren Lee, gave a speech entitled “A Climate for Change: Meeting Investor Demand for Climate and ESG Information at the SEC,”[1] in which she sets forth a near-term regulatory agenda for the SEC that centers on climate and Environmental, Social, and Governance (ESG) topics. On the same day, she also jump-started the regulatory process toward adopting potentially extensive new disclosure requirements for public companies on climate-change matters by issuing a request for comments on 15 broad issues.[2]

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Now Available: Considerations for Preparing Your 2020 Form 10-K

February 4, 2021 | Posted by Hillary H. Holmes; Elizabeth A. Ising; Thomas J. Kim; Brian J. Lane; James J. Moloney; Ronald O. Mueller; Michael Scanlon; Michael A. Titera Topic(s): Audit Committee; Capital Markets; Disclosure; Financial Statements; Proxy Statements and Annual Meetings; Registration Statements; Securities Regulation

​As we do each year, we offer our observations on new developments and recommended practices for calendar-year filers to consider in preparing their annaul report on Form 10-K. In addition to the many challenges of the past year, the SEC adopted and provided guidance on a number of changes to public company reporting obligations impacting disclosures in the 10-K for 2020. In particular, we discuss the recent amendments to Regulation S-K, disclosure considerations in light of COVID-19, a number of technical considerations that may impact your Form 10-K, and other considerations in light of recent and pending changes in the executive branch and at the SEC.​  The full memo is available at the following link:

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Key Considerations for Issuers and Auditors Regarding Going-Concern Analysis

May 28, 2020 | Posted by Brian J. Lane; Michael Scanlon Topic(s): Audit Committee; Miscellaneous; Securities Regulation

​Issuers in the United States and their auditors have related, but distinct, obligations to evaluate on a periodic basis whether there is substantial doubt about the issuer’s ability to continue as a going concern.  In normal times, this evaluation, conducted with an appropriate level of diligence, results as to almost all major public companies in the conclusion that there is no substantial doubt about the entity’s ability to meet its obligations in the months to come. 

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PCAOB Update – PCAOB Seeks Input on CAMs and Comments on Emerging Markets

April 23, 2020 | Posted by Michael Scanlon Topic(s): Audit Committee; Securities Regulation

​Over the past several days, the PCAOB has taken a number of steps to make clear that it remains active during the COVID-19 crisis. For example, after issuing only one settled enforcement order during the first three months of 2020, the PCAOB has issued two settled orders in the past week. Both concerned smaller firms, but they serve to demonstrate that the Board is still carrying out its enforcement mandate.

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SEC Releases Statement on Key Reminders for Audit Committees

January 6, 2020 | Posted by Michael Scanlon Topic(s): Audit Committee; Corporate Governance; Securities Regulation

On December 30, 2019, the Securities and Exchange Commission (the “SEC”) released a statement (the “Statement”) from Chairman Jay Clayton, Chief Accountant Sagar Teotia and the Director of the Division of Corporation Finance, William Hinman, addressing the role of the audit committee in financial reporting and highlighting key reminders regarding oversight responsibilities (available here).  The Statement is intended to “assist audit committees [in] carrying out their year-end work, including promoting efficient and constructive dialogue among audit committees, management and independent auditors.” 

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PCAOB Offers Guidance To Auditors Regarding Implementation of FASB’s Revenue Recognition Standard

October 25, 2017 | Posted by Michael Scanlon; Lori Zyskowski Topic(s): Audit Committee

The Public Company Accounting Oversight Board (the “PCAOB”) recently released Staff Audit Practice Alert No. 15 (the “Practice Alert”), titled “Matters Related to Auditing Revenue From Contracts With Customers.”  The Practice Alert provides guidance for auditors related to the Financial Accounting Standards Board’s 2014 Accounting Standard Update titled “Revenue from Contracts with Customers”  (Topic 606) (the “Revenue Recognition Standard”), which goes into effect for annual reporting periods beginning after December 15, 2017.  The Practice Alert is available here, and the Revenue Recognition Standard is available here.  While the Practice Alert is directed at auditors, it sheds light on what companies can expect from their independent auditors as companies prepare for and implement the new Revenue Recognition Standard.  Given the importance of revenue as one of the most important measures that investors use to assess a company’s financial performance, we expect that there will be a keen focus on implementation of this standard by independent auditors.

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SEC Requests Comments on New PCAOB Auditor Reporting Standard

July 28, 2017 | Posted by Michael Scanlon Topic(s): Audit Committee

On June 1, 2017, the PCAOB adopted a new auditor reporting standard—PCAOB Release No. 2017-001, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion and Related Amendments to PCAOB Standards(the “Standard”)—that will be significant for public companies.  A copy of our prior client alert on the Standard is here.

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SEC Proposes Amendments to Update and Simplify Disclosure Requirements As Part of Overall Disclosure Effectiveness Review

July 15, 2016 | Posted by Michael Scanlon; Ronald O. Mueller Topic(s): Audit Committee; Securities Regulation

At its July 13, 2016 open meeting, the Securities and Exchange Commission (the “Commission”) voted to propose amendments to certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded in light of subsequent changes to Commission disclosure requirements, U.S. Generally Accepted Accounting Principles (“GAAP”), International Financial Reporting Standards (“IFRS”), and technology.  The release approved by the Commission (the “Proposing Release”) is part of the disclosure effectiveness review being conducted by the Commission’s staff (the “Staff”).  It is also part of the Commission’s work to implement the Fixing America’s Surface Transportation (FAST) Act, which, among other things, requires the Commission to eliminate provisions of Regulation S-K that are duplicative, overlapping, outdated, or unnecessary.

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FASB Votes to Approve New Lease Accounting Standard and Plans to Issue the New Standard in Early 2016

November 18, 2015 | Posted by Michael Scanlon Topic(s): Audit Committee; Securities Regulation

At a November 11, 2015 meeting, the Financial Accounting Standards Board (“FASB”) voted to proceed with final revised standards for lease accounting.  The new standards would require lessees to record certain assets and liabilities for all leases with a term in excess of 12 months.  This is a departure from existing accounting standards, which require balance sheet presentation only for leases classified as capital leases.  This change is anticipated to have a significant impact on balance sheets for a broad swath of companies, potentially resulting in recognition of material amounts of lease-related assets and liabilities for many companies.  Companies and their advisors should consider now whether the new standards will affect compliance with financial covenants in existing or future debt arrangements.

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SEC Approves PCAOB’s New And Amended Standards On Related Party Transactions And Significant Unusual Transactions

October 24, 2014 | Posted by Michael Scanlon Topic(s): Audit Committee; Compensation Committee; Corporate Governance; Securities Regulation

Earlier this week the SEC approved, without amendment, the PCAOB’s new auditing standards that expand audit procedures required to be performed with respect to three important areas:  (1) related party transactions; (2) significant unusual transactions; and (3) a company’s financial relationships and transactions with its executive officers (including executive compensation).  The standards also expand the required communications that an auditor must make to the audit committee related to these three areas and amend the standard governing management representations that the auditor is required to periodically obtain.  See SEC Release No. 34-73396, Order Granting Approval of PCAOB’s Proposed Rules on Auditing Standard No. 18, Related Parties, Amendments to Certain PCAOB Auditing Standards Regarding Significant Unusual Transactions (October 21, 2014), available at http://www.sec.gov/rules/pcaob.shtml.     

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PCAOB Adopts Auditing Standards Governing Related Parties, Significant Unusual Transactions And Financial Relationships With Executive Officers

June 11, 2014 | Posted by Michael Scanlon Topic(s): Audit Committee; Compensation Committee; Corporate Governance; Executive Compensation; Securities Regulation

The Public Company Accounting Oversight Board (“PCAOB”) yesterday adopted new and amended auditing standards that expand audit procedures required to be performed with respect to three important areas:  (1) related party transactions; (2) significant unusual transactions; and (3) a company’s financial relationships and transactions with its executive officers.  The standards also expand the required communications that an auditor must make to the audit committee related to these three areas.  They also amend the standard governing representations that the auditor is required to periodically obtain from management.

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PCAOB Public Meeting on Proposed Changes to the Auditor’s Reporting Model

April 9, 2014 | Posted by Michael Scanlon Topic(s): Audit Committee; Corporate Governance; Securities Regulation

Last week, the Public Company Accounting Oversight Board (the “PCAOB”) convened a series of ten panels as part of a two-day public meeting regarding proposed changes to the auditor’s reporting model.  The proposed changes have elicited a range of opinions from various stakeholders and commentators, a majority of which have been critical of the proposals.  Individuals invited to appear as panelists at last week’s meeting, however, were generally supportive of the proposed changes and offered various recommendations for ways in which the PCAOB could modify its proposals in order to move forward. 

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Are Changes to the Audit Report on the Horizon? PCAOB Issues Two Significant Proposals

August 13, 2013 | Posted by Michael Scanlon Topic(s): Audit Committee; Corporate Governance; Securities Regulation

Today, the Public Company Accounting Oversight Board (“PCAOB”) proposed for public comment two audit standards that, if adopted, would significantly change the audit report model, and dramatically expand the auditor’s responsibilities in reporting on management’s disclosures outside the financial statements.  PCAOB Chairman Doty remarked that the proposed standards – running to almost 300 pages – mark a “watershed moment” for auditing in the United States.

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SEC Approves PCAOB Auditing Standard No. 16 – Communications with Audit Committees

December 18, 2012 | Posted by Michael Scanlon Topic(s): Audit Committee; Corporate Governance; Securities Regulation

Yesterday, the SEC issued an order approving new Auditing Standard No. 16, Communications with Audit Committees (“AS 16”).  AS 16 was previously approved by the Public Company Accounting Oversight Board (“PCAOB”) at an open meeting held on August 15, 2012.  As we noted in our August client alert reporting on this new standard (available here), AS 16 retains most of the preexisting communication requirements, but also adds a number of new topics that the auditor must discuss with the audit committee and requires that the auditor seek specific responses from the audit committee when discussing certain topics.  In response to comments, the SEC also clarified that the new standard will apply to audits of foreign private issuers.  Significantly, the SEC concurred with the PCAOB that AS 16 will apply to emerging growth companies (“ECGs”) and will be effective for fiscal periods beginning on and after December 15, 2012.

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Public Company Accounting Oversight Board Considers Mandatory Audit Firm Rotation

August 19, 2011 | Posted by Michael Scanlon Topic(s): Audit Committee; Corporate Governance; Securities Regulation

On August 16, 2011, the Public Company Accounting Oversight Board (“PCAOB”) issued a Concept Release on Auditor Independence and Audit Firm Rotation (“Concept Release”).  The Concept Release, available at http://pcaobus.org/Rules/Rulemaking/Docket037/Release_2011-006.pdf, solicits public comment on steps it could take under its existing authority to enhance auditor independence, objectivity, and professional skepticism, including, most notably, imposing for the first time mandatory audit firm rotation on public companies.

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SEC Adopts Final Rules Implementing Whistleblower Provisions of Dodd-Frank

May 31, 2011 | Posted by Michael Scanlon Topic(s): Corporate Governance; Dodd Frank; Whistleblower Rules

On May 25, 2011, in a 3-2 vote, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) approved its final rules (“Whistleblower Rules”) to implement the whistleblower award program of Section 21F of the Securities Exchange Act of 1934, which was added by Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).  The Whistleblower Rules establish the standards and procedures the SEC will apply in awarding whistleblowers monetary compensation for providing tips about possible securities law violations that lead to successful SEC enforcement actions and make definitions which set the contours for protections of whistleblowers under the Dodd-Frank Act’s anti-retaliation provisions.  The SEC’s press release is available here:  SEC Adopts Rules to Establish Whistleblower Program.  A copy of the adopting release and the Whistleblower Rules is available here:  Final Rules.[1]

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